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CASE NO.: Appeal (civil)  6915-6916 of 2003

PETITIONER: National Insurance Co.Ltd.                               

RESPONDENT: Vs. Ajit Kumar and Ors.                                              

DATE OF JUDGMENT: 02/09/2003

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT.

JUDGMENT: J U D G M E N T

(Arising out of SLP(C) Nos. 18242-18243/2002)

ARIJIT PASAYAT, J

       Leave granted.

       The only question raised in these appeals is whether the insurer  is liable to pay the compensation under the Motor Vehicles Act, 1988   (in short the ’Act’) for the death or bodily injury to a person  traveling in goods vehicle as passenger. Liability of the insurer was  fixed by relying on this Court’s decision in New India Assurance Co.  Ltd. v. Satpal Singh (2000 (1) SCC 237).

       Factual aspects need not be gone into in detail, as there is  practically no dispute on the factual aspects.  

       Learned counsel for the insurer-appellant submitted that Section  149 (2) of the Act is etymologically different from proviso (ii) to  Section 96 (2)(b) of the Motor Vehicles Act 1939 (hereinafter referred  to as the ’old Act’) and, therefore, the ratio in Satpal Singh’s case  (supra) has no application. In response, learned counsel appearing for  the claimants submitted that in the said case such a stand has been  negatived and it has been held that insurer is liable to pay  compensation to gratuitous passengers.

       This Court had occasion to deal with cases of passengers  traveling in goods vehicles which met with accident resulting in death  of such person or bodily injury.  Such cases belong to three categories  i.e. (1) those covered by the old Act;(2) those covered by the Act; and  (3) those covered by amendment of the Act in 1994 by the Motor Vehicles  (Amendment) Act, 1994 (hereinafter referred to as the ’Amendment Act’).

       The present appeals belong to the second category.

       In Satpal Singh’s case (supra) this Court proceeded  on the  footing that provision of Section 95(1) of the old Act is in pari  materia with Section 147(1) of the Act, as it stood prior to the  amendment in 1994.   

On a closer reading of the expressions "goods vehicle", "public  service vehicle", "stage carrier" and "transport vehicle" occurring in  Sections 2(8), 2(25), 2(29) and 2(33) of the old Act with the  corresponding provisions i.e. Section 2(14), 2(35), 2(40) and 2(47) of  the Act, it is clear that there are conceptual differences.  The  provisions read as follows:                                          Old Act:

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"2(8) "goods vehicle" means any motor vehicle  constructed or adapted for use for the carriage of  goods, or any motor vehicle not so constructed or  adapted when used for the carriage of goods solely or  in addition to passengers;"

"2(25) "public service vehicle" means any motor  vehicle used or adapted to be used for the carriage  of passengers for hire or reward, and includes a  motorcab, contract carriage, and stage carriage;"

"2(29) "stage carriage" means a motor vehicle  carrying or adapted to carry more than six persons  excluding the driver which carries passengers for  hire or reward at separate fares paid by or for  individual passengers, either for the whole journey  or for stages of the journey;"

"2(33) "transport vehicle" means a public service  vehicle or a goods vehicle;"

New Act: "2(14) "goods carriage" any motor vehicle constructed  or adapted for use solely for the carriage of goods,  or any motor vehicle not so constructed or adapted  when used for the carriage of goods;"

"2(35) "public service vehicle" means any motor  vehicle used or adapted to be used for the carriage  of passengers for hire or reward, and includes a  maxicab, a motorcab, contract, and stage carriage;"

"2(40) "stage carriage" means a motor vehicle  constructed or adapted to carry more than six  passengers excluding the driver for hire or reward at  separate fares paid by or for individual passengers,  either for the whole journey or for stages of the  journey;"

"2(47) "transport vehicle" means a public service  vehicle, a goods carriage, an educational institution  bus or a private service vehicle;"                                         (Underlined for emphasis)

        "Liability" as defined in Section 145(c) of the Act reads as  follows:

"’Liability’ wherever used in relation to the death  of or bodily injury to any person, includes liability  in respect thereof under Section 140;"

       Third party risks in the background of vehicles which are  subject-matter of insurance are dealt with in Chapter VIII of the old  Act and Chapter XI of the Act.  Proviso to Section 147 needs to be  juxtaposed with Section 95 of the old Act. Proviso to Section 147 of  the Act reads as follows:

"Provided that a policy shall not be required- (i) to cover liability in respect of the death,  arising out of and in the course of his employment,  of the employee of a person insured by the policy or  in respect of bodily injury sustained by such an  employee arising out of and in the course of his

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employment other than a liability arising under the  Workmen’s Compensation Act, 1923 (8 of 1923) in  respect of the death of, or bodily injury to, any  such employee â\200\223 (a)     engaged in driving the vehicle, or  (b)     if it is a public service vehicle engaged  as conductor of the vehicle or in  examining tickets on the vehicles, or (c)     if it is a goods carriage, being carried  in the vehicle, or (ii)    to cover any contractual liability."

It is of significance that proviso appended to Section 95 of the old  Act contained clause (ii) which does not find  place in the new Act.   The same reads as follows:-

"except where the vehicle is a vehicle in which  passengers are carried for hire or reward or by  reason of or in pursuance of a contract of  employment, to cover liability in respect of the  death of or bodily injury to persons being carried in  or upon or entering or mounting or alighting from the  vehicle at the time of the occurrence of the event  out of which a claim arises."

The difference in the language of "goods vehicle" as appearing in the  old Act and "goods carriage" in the Act is of significance.  A bare  reading of the provisions makes it clear that the legislative intent  was to prohibit goods vehicle from carrying any passenger.  This is  clear from the expression "in addition to passengers" as contained in  definition of "goods vehicle" in the old Act.  The position becomes  further clear because the expression used is "goods carriage" is solely  for the carriage of goods". Carrying of passengers in a goods carriage  is not contemplated in the Act.  There is no provision similar to  clause (ii) of the proviso appended to Section 95 of the old Act  prescribing requirement of insurance policy.  Even Section 147 of the  Act mandates compulsory coverage against death of or bodily injury to  any passenger of "public service vehicle". The proviso makes it further  clear that compulsory coverage in respect of drivers and conductors of   public service vehicle and employees carried in goods vehicle would be  limited to liability under the Workmen’s Compensation Act, 1923 (in  short ’WC Act’). There is no reference to any passenger in "goods  carriage’.

       The inevitable conclusion, therefore, is that  provisions of the  Act do not enjoin any statutory liability on the owner of a vehicle to  get his vehicle insured for any passenger traveling in a goods carriage  and the insurer would have no liability therefor.   

       Our view gets support from a decision of a three-Judge Bench in  New India Assurance Co. Ltd. v. Asha Rani and Ors. (2003 (2) SCC 223)  and Oriental Insurance Co. Ltd. v. Devireddy Konda Reddy and Ors. (2003  (2) SCC 339)

       Learned counsel for the respondents submitted that respondent  No.1 should be permitted to avail such remedies as are available in law  for recovering any amount to be paid as compensation from a person  liable to pay compensation at the first instance. No permission is  necessary for such purpose. If respondent No.1 has any remedy in law it  is open to pursue it in accordance with law. The appeals are allowed by  setting aside the judgment of the Tribunal and the High Court. There  shall be no order as to costs.

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